By Robert Mullin
NV Energy and PacifiCorp returned nearly $95,000 to generation customers after FERC revoked market-based rate authority for Berkshire Hathaway Energy affiliates in four neighboring Western balancing authority areas and imposed cost-based rates.
The refunds were disclosed in confidential documents released under a Freedom of Information Act request by Clearing Up, an energy newsletter covering the Pacific Northwest.
The documents show that NV Energy refunded $77,073 — with interest — to its customers, which included about $50,000 to Idaho Power, $20,000 to TransAlta Energy Marketing and $5,000 to Shell Energy. PacifiCorp refunded a total of $17,646.10, including nearly $6,900 to Morgan Stanley Capital, $6,100 to Tucson Electric Power and $3,900 to NorthWestern Energy.
The commission restricted Berkshire’s market-based rate authority in June after ruling that the company’s affiliates failed to disprove that they collectively exercise horizontal market power in the PacifiCorp East, PacifiCorp West, Idaho Power and NorthWestern balancing areas (ER10-2475, et al.).
The affiliates failed the indicative “pivotal supplier” and “wholesale market power” screens for initially assessing horizontal market power in the four regions, as well as a more thorough “delivered price test” analysis designed to enable companies to rebut a presumption of market power. (See Berkshire Market-Based Sales Restricted in 4 Western BAAs.)
FERC ordered the Berkshire companies to revise their tariffs for the the four areas and issue refunds for the period between Jan. 9, 2015, and April 9, 2016.
The modest sums involved reflect persistent weakness in regional wholesale electricity prices. A source close to the matter told RTO Insider that many of the sales during the period were transacted below Schedule Q — or cost-based — rates because of market conditions.
The expected future impact of FERC’s ruling got only brief mention in Berkshire’s second-quarter filing with the Securities and Exchange Commission. “The specified [Berkshire] subsidiaries affected in the order do not believe the order will have a material impact on their respective consolidated financial statements,” the company wrote.
Nevertheless, Berkshire last month requested a rehearing on the decision, contending that the commission “did not provide sound reasoning, nor did it show a path to how it arrived at its decision.” (See Berkshire Contests Market-Based Sales Restriction in the West.)
